Why Microsoft is Celebrating Apple’s Patent Win Over Samsung?

Microsoft was pretty much a bystander in Apple’s patent battle with Samsung, but the Windows folks couldn’t be happier with Apple’s $1.05 billion victory. By signing a patent deal with Apple and taking its own direction for smartphones, Microsoft is now better positioned to become a viable alternative to the Apple ecosystem.

Trouble for Samsung – which will appeal the ruling – threatens to tarnish the entire Android ecosystem (though Google may believe Android itself is immune, see Two Ways Samsung’s Court Loss To Apple Is Actually Good For Google). But Microsoft’s patent cross-license with Apple means we won’t be seeing similar suits between Apple and Microsoft.

Microsoft’s Opportunity

So is this a genuine opportunity for Microsoft and its Windows Phone operating system?

No. Not directly.

Microsoft still has to convince consumers to buy into its ecosystem and raise its U.S. market share from a few percentage points to something more substantial. But the decision could encourage phone makers to lean away from Android and more toward Windows Phone, gaining Microsoft “shelf share” that could someday lead to actual sales.

“Microsoft can actually benefit from the Apple-Samsung verdict, as Windows Phone doesn’t look as expensive or controversial as Android,” said Patrick Moorhead, principal at Moor Insights & Strategy, in an email. “What once was a ‘free’ OS, Android now costs the Microsoft license fee, the potential Apple license fee, and the threat of legal battles with Apple. This could push smartphone vendors like HTC, Sony, LG and even Huawei and ZTE closer to Windows Phone.”

Android’s Doomsday Scenario

The doomsday scenario goes like this: In September, Apple will ask the court for an injunction, preventing Samsung from selling the infringing devices within the United States.

If Apple successfully bars the phones at the heart of the case from the U.S. market, the result will be a gaping hole on store shelves. While the ruling doesn’t include Samsung’s latest flagship phone, the Galaxy S III, an injunction would likely force Samsung to concede market share or spend heavily to aggressively develop new, non-infringing models to fill the gap.

Apple then marches through the ranks of other Android phone manufacturers, filing similar suits, winning fines and royalty payments, and possibly injunctions as well. Consumers are left wondering whether or not the phone they preordered will be barred from shipment before launch date – an unlikely scenario, but one that would undermine consumer confidence in Android.

Eventually, Apple would turn against Motorola Mobility, now owned by Google, for a final showdown – though Google’s “core” version of Android could be a tougher nut to crack As Google noted in a statement, Most of these [patents] don’t relate to the core Android operating system.”

What Does Microsoft Get?

So what does Microsoft actually gain from all of this? Three things:

First, there’s the simple answer: Microsoft’s patent deal offers protection. While the relationships could certainly sour, Microsoft must feel like it can operate with relative impunity at the moment.

Second, Microsoft can continue down its own development path without feeling like Apple is looking over its shoulder. While Microsoft’s Modern UI (formerly known as Metro), the “live tiles” or widgets that continually update, the “charms” and the Windows “home” button seem easily differentiated from Apple’s design, it’s always a good idea to avoid expensive, time consuming lawsuits – even if you eventually prevail.

“[The deal should] provide a stronger opportunity for both of Microsoft’s new platforms – Windows 8 and Windows Phone 8 – because they come with indemnification against Apple, suddenly making them far safer,” Rob Enderle, an independent consultant, told the BBC.

The third benefit may be the most important: tarnishing Android with the litigation brush leaves Microsoft looking squeaky clean by comparison. Manufacturers now have to factor in a “total cost of ownership” formula when choosing which mobile operating system to use – and that formula now has to include the very real threat of litigation.

From a consumer standpoint, the court case isn’t likely to sway Apple or Android partisans, but it could subtly push the general public away from Android.

They could run toward the safe bet: Apple. But they might be open to something new:

As Bill Cox, marketing director for Microsoft’s Phone division, tweeted following the verdict: “Windows Phone is looking gooooood right now.”


Posted on February 22, 2013, in Corporate warfare. Bookmark the permalink. Leave a comment.

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